Making of Amaravati: Andhra Farmers Pay the Price for ‘Dream City’

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.

9 min read

Odur Srinivasa Rao was unsure about giving up eight acres of his jasmine and vegetable farm for the building of Andhra Pradesh’s new capital city Amaravati. But on the very last date of submission, he changed his mind.

On that day in 2015, an official from the Capital Region Development Authority (APCRDA) – in charge of building the city from scratch – came to Nedamaru village, and held an informal meeting by the panchayat office. Hundreds of anxious farmers stood around him.

I welcome you all to give your land today, and be part of the future city.... But if you decide not to pool your land, then we will have no option but to acquire it through the Land Acquisition Act.
Capital Region Development Authority (APCRDA) offical tells Odur Srinivasa Rao, farmer in Andhra Pradesh

Rao froze. “No, not bhoo sekarana (land acquisition) again,” he thought. In 1983, his family had given another eight acres towards a housing colony constructed by the Vishakapatnam Urban Development Authority. They lost their farm income, and for years, struggled to get their due compensation.

We finally gave up on lakhs of rupees, and every time a family member is sick, or a child needs college admission fees, I wish I had that money. Or at least that land.
Odur Srinivasa Rao, farmer 

Ideally, Rao didn’t want to have to part with more land again. But when it seemed like the state would take his land no matter what, he hedged his bets. On the very final date, he agreed to give his last eight acres to the government’s land pooling scheme because he feared the alternative: land acquisition.

A Chief Minister's Determined Dream

Rao is now among over 28,000 farmers who have pooled their land towards the construction of the city of Amaravati, and helped the AP government collect “89 percent of the targeted 38,581 acres” according to a APCRDA project report as on March 2017.

The Land Pooling Scheme does not fall under the Central government’s land acquisition law – The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 (LARR). Pooling emerges from a separate state law called the Andhra Pradesh Capital Region Development Authority Act passed by the Assembly on 22 December, 2014.

This law came into being soon after Telangana was carved out of Andhra Pradesh, and got to keep the historical, teeming IT and film city of Hyderabad as the capital – leaving newly-divided Andhra to set up a new capital for itself.


Divided AP’s Chief Minister Chandrababu Naidu, who created the tech hub in an already bustling Hyderabad as leader of united AP, envisioned Amaravati as a “livable, environmentally sustainable people’s capital”. The state government and his Telugu Desam Party promote the capital as “the honourable CM’s vision”, thus inextricably tying the fates of the leader and Amaravati. Naidu is the senior-most Minister to have moved into a house in the capital area, while most of the Secretariat officials travel back on weekends to their families who still live in Hyderabad.

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.
The single-lane road running through Amaravati’s 29 villages is lined with posters of Chandrababu Naidu  
(Photo: Rohini Mohan/The News Minute) 

This explains the near-obstinacy with which the new city is being pursued.

The AP government chose the current location for the greenfield capital along the Krishna river, between the existing towns of Guntur and Vijayawada, replacing 29 agricultural villages that formed what the state itself describes as the food bowl of the region.

The Sivaramakrishnan expert committee constituted by the Central government on 28 March, 2014 expressly recommended avoiding this Krishna delta region for various reasons, including objections to diverting cultivated lands (55 percent of the area) for a concrete capital. The Naidu government, however, chose to ignore the committee’s recommendations.

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.
Most farms in the Krishna delta are multicropped. This farm grows ginger, bottle gourd, plantain and lemons
(Photo: Rohini Mohan/The News Minute) 

Land Pooling vs Acquisition

The state did not underestimate the complexities of getting farmers to part with their land, the enormous state expense in compensating them fairly, and the electoral fallouts of angering Kamma-dominant villages that traditionally voted the TDP.

The land pooling scheme was launched so that the government can bypass the bureaucracy, long delays, and expense of collecting land through the land acquisition act.
Ajay Jain, Principal Secretary of the Infrastructure Department

The LARR 2013 central legislation, among other safeguards, places restrictions on acquiring multicrop agricultural land. It requires 80 percent consent from landowners, compensation at near market rates, and social impact assessments to measure the effect of any new development on the existing residents.

Land pooling has been devised to require none of this. This scheme doesn’t offer monetary compensation for land taken. In exchange for village land taken today, it offers a developed piece of land in the future city.

For every fertile acre pooled, the state will return 25 percent of developed area in the future city: a 1,000 square-yard residential plot, and a 250 square-yard commercial plot. Less fertile and assigned lands similarly receive 1,000 plus 200 square yards, and 800 plus 100 square yards respectively. In addition, for 10 years, the state pays a compensation of between Rs 50,000 and Rs 30,000 a year. 12,000 landless families will be paid a pension of Rs 2,500 a month for 10 years.

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.
Raghavamma, who earns Rs 600 per day as a farm labour supervisor worries how she’ll raise three grandchildren on the Rs 2,500 pension for landless labourers
(Photo: Rohini Mohan/The News Minute) 
Had we had to go for land acquisition, it would have cost us Rs 50,000 crores minimum, which was impossible for the government of a new state like ours to take on and pay for years in the future,
Ajay Jain, Principal Secretary of the Infrastructure Department

Pooling was developed and promoted, he says, as a way to both vastly reduce outlay, and to “make farmers stakeholders and beneficiaries in the development”.

We’ve seen many projects where land was acquired, and construction was done, but farmers were not happy... In pooling, as the city develops, the price of the developed plot we give them will shoot up, and this is how the landowner gets his value. And because we are not struggling over land, we can also build the city faster and cheaper. It’s a win-win.
Shreedhar Cherukuri, Commissioner, APCRDA

Land Pooling an Uncertain Promise?

Several farmers in the Krishna delta supported the experimental pooling scheme, as a better alternative to the known devil of land acquisition.

Farmers repeatedly told us that among the strongest reasons to go for pooling, was the negative memory of how unfair previous iterations of land acquisition (pre-2013) had been.

Then, landowners’ consent was not sought, new development kicked them out, and monetary compensation was a pittance of the market value.

“The government did not correct us about our assumptions, perhaps because our fears suited them,” says Chanu Nagendram, a Tulluru resident whose Dalit ancestors grew paddy and vegetables in their government-assigned land of two acres. Small and marginal farmers like her were left with no choice when affluent, large-scale Kamma farmers pooled their land.


But the acquiescence has been less than total.

A few hundred farmers from five villages have been vocal against the pooling system. They own a total of about 2,000 acres that – inconveniently for the government – sit at the heart of the city plan. They are not convinced the city will come up at all.

“If there is no city, then what will I do with a tiny plot in it?” asks Venkata Reddy. This 59-year-old farmer initially wanted to pool his land, but withdrew when the state classified it as dry land, and offered him lower compensation than he expected.

“I earn Rs. 1.5 lakh a month from my six acres,” says Reddy, who grows vegetables, paddy, Bengal gram, turmeric and bananas. “Suppose I give my land, and stop farming for 10-15 years, taking a Rs 50,000 monthly compensation from the government. What if Amaravati never comes up, or what if the land prices don’t shoot up as they expect? I’ll be left with no income, and a small piece of land that is unfertile and undeveloped.”

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.
Vinay Kumar, an engineer taking care of his father’s fields, says IT companies and modern cities should come on dry land, not farms
(Photo: Rohini Mohan/The News Minute) 

Farmers against land pooling petitioned the Andhra Pradesh High Court, which ordered the state government to apply the LARR in these cases.

They have to now get consent from 80 percent of our village, and offer us compensation at market value – there is no business of future promises,
Nirmalatha, a lawyer whose family also owns farmland in the capital region.

Politics of Trust

Pro-pooling farmers like L Sudhakar Rao are anxious about anti-pooling farmers. “I sort of understand their opposition, but they shouldn’t ruin us,” says Sudhakar Rao, who gave 40 acres to pooling.

His son and daughter are doctors abroad, and he is the last farmer of his family. “I’m giving my land to secure my family’s economic future,” he says.

Economic security in these parts is an equation not only of the acreage a farmer owns and the opportunities available for his children, but also of caste and party affiliation.

Most pro-pooling farmers are Kammas, like Chief Minister Chandrababu Naidu. They are traditional voters of the ruling TDP. Most anti-pooling farmers are Reddys or Kapus, supporting the YSR Congress, the BJP, the Loksatta Party and others. Sudhakar Rao, for instance, admits that he is a TDP voter, and finds it easier to trust the Chief Minister.

If you don’t pool in your land for Amaravati, it’ll be acquired through Land Acquisition Act, the farmers were told.
There is a politics to land pooling. Those trusting the govt and giving up fields are largely pro-TDP, and those refusing support the Opposition.
(Photo: Rohini Mohan/The News Minute) 

“The majority of us who gave land for pooling – for whatever reason – are farmers too, and if the city construction is delayed, we stand to lose a lot,” says Sudhakar Rao. “I still trust the government but I’m not happy with the speed of construction. We are planning to ask the government to pay us monthly compensation for 15 instead of 10 years.”

Delayed Timelines

For the land pooling model of skyrocketing future land prices to work for the farmers, Amaravati must meet its timeline. Two years in, Cherukuri insists the city is “50 percent ready in preconstruction activities,” but the region looks far from it. Only the Secretariat buildings, and the half-built (but functional, according to Principal Secretary Jain) SRM University and Vellore Institute of Technology are visible.

The Chief Minister has repeatedly changed architects and consultants in two years, his latest choice being Baahubali film director Rajamouli as consultant designer for the AP Assembly.

A World Bank loan of US 300 million dollars has been held back after an investigative team reported the possibility of intimidation in land pooling. Of the target investment of a massive Rs 58,000 crore, Principal Secretary Ajay Jain lists the existing sources: Rs 2,500 crore from the Central government, an approved loan of Rs 7,500 crore from HUDCO, digital brick donations via crowd funding, equity of Rs 700 crore, Rs 500 crore from the state budget per year, and Rs 2,000 crore as APCRDA bonds. That leaves the state short of about Rs 45,000 crore.

It’s not only the government who’s been pooling land. A major realtor in the area admitted that he bought up close to 200 acres in the region at an average of Rs 30 lakh an acre.

But since 2016, he has been struggling to find purchasers. “The government delayed the plot allotment, and no investment seemed to be coming, so land prices fell. Then there was demonetisation,” the realtor says, shaking his head worriedly.

APCRDA Commissioner Cherukuri says 71,200 plots are now allotted, and landowners have been shown their locations on map online. “We are yet to mark them on the ground,” he says. “The prices will stabilise on a high, I am sure of it.”

Government Razes Fields

While the planned city is nowhere in sight, agriculture is being brought to a halt. To convince visiting teams of potential investors and realtors, and start construction, farmers say the APCRDA has been pushing them to stop cultivating.

“Bulldozers were brought to my banana plantation… I couldn’t watch,” says Diwakar Naidu. 20 of his 36 pooled acres are now barren, while he stealthily grows paddy, turmeric and lemons on the rest.

Srinivasa Rao too had not realised that as soon as he agreed to pool his land for Amaravati, he would have to actually stop farming.

“I thought I had time to stop,” says Rao, walking around the bushes bursting with three types of jasmine. “People in cities think farmers are sentimental when they are attached to land, but that is because you don’t understand our rationale.”He explains: the government pays him Rs 30,000 a month, but that doesn’t cover his son’s medical college fees. “By farming, I make about a lakh a month,” he says.

Owning land gives him the flexibility to sell small pockets when he needs large sums of money, like for a house, wedding, or college.

They are building a city with IT companies, banks and hospitals, and saying that our sons will get jobs there, that they will never have to farm. But how will my son become a doctor if his farmer father can’t afford to educate him?
Odur Srinivasa Rao, farmer 

As Rao leaves his field, he opens his fist, full of the jasmine buds he’s been picking almost as a reflex. “These buds will become fragrant at sundown,” he says, then smiles sadly. “If only I could know everything else with this kind of certainty.”

(The article was originally published on The News Minute and has been republished with permission.)

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